Types of Property that Can Be Liquidated under Chapter 7 Bankruptcy

Types of Property that Can Be Liquidated under Chapter 7 Bankruptcy

If you are facing serious financial obstacles for which there is little hope in sight, a Chapter 7 bankruptcy may be an option. Chapter 7 bankruptcy is a liquidation process, and there are specific types of property and assets that can be liquidated (while others are spared). If your finances are stopping you from moving forward in life, consult with an experienced Chapter 7 Indiana bankruptcy attorney today. 

Your Bankruptcy Estate

If you file for Chapter 7 bankruptcy, those assets that the law requires you to liquidate will go into what is known as a bankruptcy estate. While you can expect to release a considerable portion of your assets when you file for bankruptcy protection, some of your assets will be exempt. 

Non-Exempt Assets

In order to get a better idea of assets that are exempt, it is important to understand those properties that generally are not. Assets that are typically not exempt from liquidation (which means that you’ll need to give them up) include:

• A second home or a vacation home
• A second vehicle
• Your cash, bank accounts, and stocks, bonds, and other financial investments
• Family heirlooms of significant value
• Valuable collections, such as of art, stamps, coins, jewelry, or anything else of significant value
• Valuable musical instruments (unless they contribute to your ability to make a living as a professional musician)

Exempt Assets

Those properties that won’t be liquidated in your Chapter 7 bankruptcy boil down to what the law considers the necessities of modern life, which means those assets that are necessary for you to continue working and taking care of the needs of daily living (such as having a roof over your head and having a vehicle that gets you to work). With this in mind, the following kinds of assets are generally protected from the liquidation process:

• Your car (up to a certain value)
• An amount of your clothing that is considered reasonably necessary and your jewelry (up to certain values)
• Household goods and furnishings that are considered reasonably necessary and household appliances
• Your pension
• A portion of equity in your home (up to a certain amount)
• Those items that are considered tools of your trade (up to a certain value)
• A portion of your wages that you’ve earned but haven’t been paid yet
• Any public benefits – including public assistance, social security, and/or workers’ compensation – that have accumulated in your bank account
• Any damages that you have been awarded in a personal injury case

You Need an Experienced Chapter 7 Attorney on Your Side

Don’t allow financial hardship to keep you in a hole that you can’t dig yourself out of. Our attorneys at Whitten & Whitten Attorney in Merrillville, Indiana is a trusted Chapter 7 attorney with decades of impressive experience successfully guiding cases like yours toward optimal outcomes that help our clients move forward with their lives. We’re here for you, too, so please don’t hesitate to contact us for more information today.